Labor Group: Nike Not Living up to Promises

Three years ago, Nike chairman Phil Knight stood before the National Press Club and told the world he was so tired of labor-rights groups criticizing the athletic shoe company he founded that he was going to personally make sure conditions improved at Nike factories around the world.

Knight has fallen short of his promises — far short, in some
cases, according to a 105-page report released by the Global
Exchange.

"During the last three years, Nike has continued to treat the
sweatshop issue as a public-relations inconvenience rather than as
a serious human rights matter," said Leila Salazar, corporate
accountability director for the San Francisco-based labor-rights
organization.

Six Promises Made by Knight

Knight discounted the report, and said Nike has done more than
any other corporation in the shoe-and-clothing industry to make
sure workers are treated fairly. Knight said, the company has
promoted globalization of its workforce as a way to lift wages in
many countries.

"I think we've made significant strides, and I'm proud of what
the company's done over the last three years," Knight told The
Associated Press. "It may take a while longer, but I do think it
will be understood that Nike is a good citizen in all the countries
that it operates in."

The report by the Global Exchange cited six promises Knight made
during a May 12, 1998 speech at the National Press Club in
Washington, D.C.:

All Nike shoe factories would meet U.S. Occupational Health and
Safety Administration indoor air quality standards.

The minimum age would be raised to 18 for Nike shoe factories,
16 for clothing factories.

Nike would include nongovernmental organizations, or NGOs, in
factory monitoring, and the company would make inspection results
public.

A micro-enterprise loan program would be expanded to benefit
4,000 families in Vietnam, Indonesia, Pakistan and Thailand.

Research and forums on responsible business practices would be
funded at four universities.

Knight: Bound to Be Problems

But the report concluded that "the projects Knight announced
have been of little benefit to Nike workers," or "have helped
only a tiny minority, or else have no relevance to Nike factories
at all."

The report said that "Nike workers are still forced to work
excessive hours in high pressure work environments, are not paid
enough to meet the most basic needs of their children, and are
subject to harassment, dismissal and violent intimidation if they
try to form unions or tell journalists about labor abuses in their
factories."

Knight said there might have been isolated cases of poor
management, but "I don't think that's ever been typical of Nike
factories."

During an interview, Knight and two top managers noted that Nike
has contracts with factories that employ at least 500,000 workers
in more than 50 countries, so there are bound to be problems,
including cultural differences that shape management practices.

Jason Mark, spokesman for Global Exchange, said the key to
solving many of those problems would be paying a "living wage"
that allowed workers to save money, raise a family and move up to
their society's middle class.

"Nike says they can't find a formula because it's different for
every country," Mark said. "It's an assumption that's convenient
for them because it allows them to pay lower wages."

In Agreement on One Point

Dusty Kidd, vice president of corporate responsibility for Nike,
said economic need is important, "but we've yet to really
understand how you can predicate a worker's pay based solely on
need and not on productivity."

"You've got to have productivity figured into how you pay
people, or you just don't make a product at a price you can sell
and make a profit," Kidd added.

The Global Exchange report agreed with Knight on one point: Nike
has improved health and safety conditions at its plants.

But the labor-rights group urged Knight to make some new
promises, including higher wages, independent factory monitoring
and support for unions.

Mark, the Global Exchange spokesman, also said that stronger
regulation is needed for multinational corporations, whether it is
based on U.S. law or international law.

"In the absence of U.S. government regulation on multinational
corporations, the only thing that's left is for citizens to police
corporations, and/or for the corporations to police themselves,"
Mark said. "And we don't believe the corporations are policing
themselves."